Strategic Analysis of Sonic Corp

Executive Summary Sonic is the largest drive-in chain in the United States. Under the slogan "America's Drive-In," a Sonic features fast service by roller-skating carhops and unique menu items that cannot be found at McDonald‘s, Burger King, or Wendy‘s. Sonic restaurants operate in 27 states so it is smaller than leading fast food chains however it is still a significant competitor. Founded by Troy Smith and Charlie Pappe in 1953, Sonic went from a single root beer stand to a popular franchise. In 1973, Sonic restructured as a franchise company and later became Sonic Corporation. The company experienced financial decline due to the lack of consistency from its franchisees so they were bought out by Sonic Corporation and restructured. In 1995, Sonic introduced "Sonic 2000," an aggressive multi-layered strategy to further unify the company in terms of a consistent menu, brand identity, products, packaging, and service. The campaign was successful and Sonic's brand recognition increased. Strengths include a strong competitive nature, flexible strategies, and employee/franchisor relationships. Weaknesses include lack of communication and domestic expansion. Threats in the external environment include company size, employee turnover, weak economy, rivals in similar industries, overseas expansion, and slow growth markets. Sonic can overcome these threats with opportunities such as global expansion, increase in the number of quick service consumers, and appealing investment opportunities. Alternative strategies and recommendations suggest that Sonic should concentrate on a low cost strategy and focusing on niches such as the health food market.

History and Strategy of Sonic Corporation Sonic Corp. franchises and operates the United States' largest chain of drive-in restaurants and the fifth largest hamburger chain. As of August 31, 2000 there were 2,172 Sonic restaurants, of which 1,860 were owned and operated by independent franchisees; the remainder were